Do you see the real person, or just what you want to see?

Posted January 19, 2016 by Glenn Matecun
Categories: Alzheimer's Disease, Asset Protection, Elder Care, elder law, Estate Planning, Long-Term Care Planning, Medicaid Planning, Nursing Home Planning, Veterans Benefits & VA Planning

This is a preview of this month’s legal corner article which will be published on January 27, 2016.

90-Year Old - Wheelchair

“Uniqueness is what makes you the most beautiful.” 

~ Lea Michele

I was re-reading one of the late Stephen Covey’s books and a story caught my eye.   The story is about what he calls a “paradigm shift”, but that’s too complicated for me.  I just call it “perspective” or “how you look at the world”.

Picture Covey riding peacefully on a subway reading his newspaper.  His peaceful ride was interrupted when a father and his three young children got on the train.  The kids were running up and down, yelling, throwing things.  Covey was annoyed at the kids and, even more, at the father who was allowing them to carry on.

After several minutes, Covey asked the father if he could control his children a little more.  The man lifted his gaze and said softly, “Oh, you’re right.  I guess I should do something about it.  We just came from the hospital where their mother died about an hour ago.  I don’t know what to think, and I guess they don’t know how to handle it either.”

Can you imagine what Covey thought at that moment?  In an instant, his perspective – his view of this man’s world – changed.  This new information made him think differently, feel differently and behave differently.

In my elder law practice, I have noticed over the years that our society has become desensitized about growing old and many people have a flawed view of the elderly.  They see the elderly as “generic” people – like they are all the same.

It is not uncommon for my law office to deal with clients who are well into their 80’s, 90’s and even some over 100 years old.  Let me tell you, no matter the age they don’t consider themselves “elderly”, they consider themselves a person who happens to be a certain age.  And each person is unique and has his or her own stories.

Consider Max, who is 90 years old and who was married to his wife, Sandy, for 64 years.

His eyes brighten as he talks about his first job and ripping open his first paycheck.  He remembers his hands gripping the steering wheel the first time he was allowed to drive the family car alone.

Max recalls his first dog, Abby, and how she followed him everywhere.  And he remembers hugging Abby as she took her last breath, because the vet said putting her to sleep was the only option.

He proudly reminisces about walking to the podium to receive his college degree, the first one in his family to do so.

His graduation ceremony evokes other memories, including a road trip to Florida with his college buddies, Stan and Eddie.  “I’m the only one left”, he whispers.

Max is reverent and humble when he talks about his wife, Sandy, who has been gone for 6 years.  He is almost in a trance as he flashes back to their first date, falling in love, dancing in the kitchen, getting married, raising their daughter.

He is somber when he talks about his service in World War II.  He remembers bombs and bullets and friends who never made it home.  “Too many didn’t come back”, he says.

Max talks about “ice cream dates” that he used to have with his only daughter, and how he told her he wouldn’t cry when he walked her down the aisle.  “But I did”, he says, a wry smile creasing his face.

He talks about his grandchildren and how the whole family went on vacation up north, swimming, fishing, playing.

He recalls with pride the top salesman award he earned at his company for five straight years.

You can sense Max’s heartache when he recounts his health problems that resulted in him moving out of the home he loved after 52 years.

Can you imagine having your car keys taken away?  Or being told you can no longer live on your own?  Or that you must move out of the home that you built with your own hands?

That was Max after his wife died and his health started to deteriorate.

Today, Max is living in an assisted living community with over 70 other men and women.

If you entered the foyer and walked past Max sitting in his wheelchair, you may be tempted to see him as “another old man”.

He is not.

He is unique, just like you and I are unique.

The next time you see a “Max”, I challenge you to see him from a different perspective, a different world view.

He is a person who had parents, a brother, sisters, a daughter, a wife.  He has fallen in love, had a broken heart, seen his daughter and grandchildren grow up, seen his friends and loved ones die, and still, even today, has hopes and dreams.

When you see Max as unique, you will change your perspective, like Stephen Covey on the subway.  In an instant, you will think differently, feel differently and behave differently.  And that perspective is exactly what Max has earned, and what he deserves.

_________________________________________________________________

 Glenn Matecun is a founder of the law firm of Matecun, Thomas & Olson, PLC in Howell.  He is an estate planning and elder law attorney, and is accredited by the Department of Veterans Affairs. His website, www.MichiganEstatePlans.com, is packed with helpful information and action plans for anyone dealing with estate planning, elder law, nursing home, probate or Veterans’ benefits issues.  You can email him at gmatecun@mtolaw.com or call (517) 548-7400 for a free consultation.

What is a Lady Bird Deed?

Posted March 31, 2012 by Glenn Matecun
Categories: Estate Planning, Long-Term Care Planning, Medicaid Planning, Nursing Home Planning, Real Estate

Check this out if you want to learn more about how a Michigan Lady Bird Deed works and how it can help with your Will, Trust or other estate planning.

Beware! Estate Planning for Second Marriages Can Be Tricky.

Posted March 8, 2012 by Glenn Matecun
Categories: Durable Power of Attorney, Estate Planning, Estate Tax, IRA Beneficiaries

The following was recently published in my “Ask the Lawyer” column:

Question:   I just got remarried and both my husband and I have children from previous marriages. I am worried that my son and daughter won’t get anything if I die first.

Answer:   You must take special care to plan if you are in a second marriage because of the complex relationships between step-parents and step-children. We see two common problems: (1) you add your husband’s name on the house and bank accounts, and if you die first he gets everything, and your children get nothing; or (2) you leave everything to your children, and your husband gets nothing (if you can believe it, we have had kids evict their mom’s husband from the house after their mom died). One other thing, your husband has inheritance rights to your assets even if you have a Will leaving everything to your children (this is called “spousal election”). We have special “Second Marriage Estate Planning Worksheet” to help you and your husband work through these issues (yes, there are solutions, and they result in taking care of your husband and your children, which is what most people want). If you would like our free Worksheet, please email me at gmatecun@mtolaw.com or call me at (517) 548-7400.

IRS Issues Long-Term Care Premium Deductibility Limits for 2012

Posted October 23, 2011 by Glenn Matecun
Categories: Estate Planning, Long-Term Care Planning, Medicaid Planning, Nursing Home Planning, Veterans Benefits & VA Planning

The Internal Revenue Service (IRS) is increasing the amount taxpayers can deduct from their 2012 taxes as a result of buying long-term care insurance.  Premiums for “qualified” long-term care insurance policies (see explanation below) are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 7.5 percent of the insured’s adjusted gross income.

These premiums – what the policyholder pays the insurance company to keep the policy in force – are deductible for the taxpayer, his or her spouse and other dependents.  Note that if you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed 7.5 percent of your income.  However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2012.  Any premium amounts for the year above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year

 

Maximum deduction for year

 

40 or less $350.00
More than 40 but not more than 50 $660.00
More than 50 but not more than 60 $1,310.00
More than 60 but not more than 70 $3,500.00
More than 70 $4,370.00

What Is a “Qualified” Policy?

To be “qualified,” policies issued on or after January 1, 1997, must adhere to certain requirements, among them that the policy must offer the consumer the options of “inflation” and “non-forfeiture” protection, although the consumer can choose not to purchase these features.  Policies purchased before January 1, 1997, will be grandfathered and treated as “qualified” as long as they have been approved by the insurance commissioner of the state in which they are sold.  For more on the “qualified” definition, click here. The Georgetown University Long-Term Care Financing Project has a two-page fact sheet, “Tax Code Treatment of Long-Term Care and Long-Term Care Insurance.”   You can download it here in PDF format:  http://ltc.georgetown.edu/pdfs/taxcode.pdf

Glenn Matecun is a Michigan attorney focusing on Estate Planning and Elder Law.  He helps families avoid the devasting financial effects of nursing homes and other long-term care communities.  For more information, visit www.MichiganEstatePlans.com or www.MTOlaw.com

 

Landlord’s Foreclosure With Tenants? Yes, Mr. or Mrs. Tenant, You Have Rights and Protections.

Posted July 9, 2011 by Glenn Matecun
Categories: Michigan Foreclosure, Real Estate

It’s a relatively new occurrence with the crash of our financial system and the foreclosure epidemic. Have you seen it yet? Here’s the scenario:

–  Mrs. Tenant signs a lease with Mr. Landlord

–  Mr. Landlord fails to make his mortgage payments

–   The lender forecloses on Mr. Landlord (sometimes with the Mrs. Tenant’s knowledge, sometimes without)

–  After foreclosure, the lender evicts Mrs. Tenant, even though there is still time left on Mrs. Landlord’s lease

Fair?  Not fair?  I guess it depends on whether you are Mrs. Tenant or the lender.

Well, in an attempt to bring some certainty to tenants living in foreclosed homes, the federal government passed a law called the Protecting Tenants at Foreclosure Act. 

Athough the law was enacted in 2009 and amended in 2010, very few people seem to be aware of it. Here are the key provisions of the law:

General Rule #1:  A tenant with a lease has the right to remain in the home until the lease term expires. This rule applies unless one of the following exceptions to General Rule #1 applies:

Exception #1: If the tenant is a child, spouse or parent of the landlord (that is, the homeowner before foreclosure). Of course, this exception stops a landlord from giving a close family member a “sweetheart lease” right before foreclosure.

Exception #2: The lease must have been formed in a “arms length transaction”. In short, the deal between the landlord and tenant must have been a “normal”, “fair” deal between two parties with equal bargaining power. Again, this exception stops the lender from being forced to deal with a one-sided lease after foreclosure.

Exception #3: If lease is for “substantially less than fair market value”, the tenant may not stay until the end of the lease term. Once again, this exception protects the foreclosing landlord from being on the wrong end of an unfair lease.

Exception #4: If the foreclosing party desires to personally occupy the property, or sells the property to someone who wants to personally occupy the property, a tenant must be given 90 days notice to move. This exception will allow a lender or person buying from a lender to evict you before the end of your lease term.

Exception #5:  If you don’t pay your rent, or if you violate any other term of your lease, you can be evicted. Yes, as one of my college economics professors once said, there is no such thing as a free lunch. As a tenant, you must pay rent and meet all other terms of your lease.

General Rule #2: If a tenant’s lease expires before the foreclosure is concluded, or if a tenant’s lease ends within 90 days of the foreclosure being concluded, the foreclosing lender may not evict the tenant without giving the tenant at a minimum 90 days notice.

How to analyze your situation: If you are a tenant and fall within General Rule #1, and don’t fall within any of the exceptions, you can stay until the end of your lease. If you don’t fall within General Rule #1, the foreclosing lender (or new owner) may not evict you without giving you 90 days notice.

Other helpful information:

The law was originally set to expire on December 31, 2012, but that date was extended by a recent amendment, and the law will not expire until December 31, 2014.

The law applies to Section 8 rentals. If you are a tenant and find yourself at the wrong end of a foreclosure, call an experienced Michigan real estate attorney to discuss your options.

Glenn Matecun

Michigan Attorney | Michigan Landlord-Tenant Law

www.MichiganEstatePlans.com

Major Victory For Mortgage Borrowers In Michigan: MERS Foreclosures Are Illegal

Posted May 5, 2011 by Glenn Matecun
Categories: Michigan Foreclosure, Real Estate

The Michigan Court of Appeals issued a decision on April 21, 2011 that will have a major impact on past and present foreclosures in Michigan.  The Court held that foreclosures by advertisement started by the Michigan Electronic Registration System (MERS) are against the law.  This important decision leaves in question the title to potentially thousands of homes that were previously foreclosed on by MERS in Michigan.   

In short, the Michigan Court of Appeals held that MERS is not a proper party to conduct a foreclosure by advertisement under Michigan law.  Following is the pertinent portion of the Court’s introduction and conclusion:

These consolidated cases each involve a foreclosure instituted by Mortgage Electronic Registration System (MERS), the mortgagee in both cases. The sole question presented is whether MERS is an entity that qualifies under [Michigan law] to foreclose by advertisement on the subject properties, or if it must instead seek to foreclose by judicial process.  We hold that MERS does not meet the requirements of [Michigan law] and, therefore, may not foreclose by advertisement.

Defendants [borrowers] were entitled to judgment as a matter of law because, pursuant to [Michigan law], MERS did not own the indebtedness, own an interest in the indebtedness secured by the mortgage, or service the mortgage. MERS’ inability to comply with the statutory requirements rendered the foreclosure proceedings in both cases void . Thus, the circuit courts improperly affirmed the district courts’ decisions to proceed with eviction based upon the foreclosures of defendants’ properties.

Note the Court’s language:  “void ab initio” – in layman’s terms, that means “void from the very beginning”.  So, what if MERS foreclosed on your home last year, or the year before?  The argument is that you have been wrongfully driven out of your home when you still owned it.  That is because MERS’ foreclosure by advertisement was “void from the very beginning”.

If you have been foreclosed on by MERS (or if you don’t know who was involved in your foreclosure), you should find out whether the foreclosure was against the law, and what you can do about it.  Call our toll-free number at (888) 487-6150 – we will walk you through a checklist (no cost to you) to determine whether your foreclosure was one of the illegal MERS foreclosures.  If it was illegal, we will talk with you about the best way to move forward.  Remember, claims like this in Michigan have a “statute of limitations”, so it’s best to check as soon as possible to make sure you don’t lose your rights.

Be Careful Deeding Real Estate To A Family Member Before Death. The IRS Is On The Hunt To Impose Gift Tax.

Posted April 2, 2011 by Glenn Matecun
Categories: Estate Planning, Real Estate

Clients often ask me:  “Should I deed my home to my kids now [before I die] to avoid probate?”   This question generally arises when they are told by their realtor/barber/uncle/friend/etc. (you get the point) that this is the best way to do their estate planning.  The short answer is NO, NO, NO!    Well, now the IRS has given us one more good reason why NOT to rely on a deed (whether a quitclaim deed or warranty deed) to transfer property prior to death.

The following is an excerpt from Forbes writer William P. Barrett, from an article titled “IRS Targets Family Real Estate Transfers”:

As part of a new national hunt for gift tax evaders, the IRS has asked a federal court for permission to order a California state tax agency to hand over its computer database of everyone who transferred real estate to relatives for little or no consideration from 2005 to 2010. If granted, the sweeping request could expose many Californians–especially those who didn’t file federal gift tax returns–to audits as well as penalties or even substantial back taxes. The little-known lawsuit, called “In the Matter of the Tax Liabilities of John Does,” was filed in December on behalf of the IRS in federal court in Sacramento, the state capital. That’s the home of the California Board of Equalization, which oversees property tax issues across the state. No action has been taken yet on the request. The IRS all but admits it is going on a fishing expedition for John Does–but one it considers to be in well-stocked waters. An affidavit attached to its lawsuit signed by Josephine Bonaffini, a Boston-based official of the national IRS Estate and Gift Tax Program, states that the agency already has obtained official real estate transfer information from 15 other states [not Michigan – yet] and found widespread noncompliance.  Nationally, Bonaffini said, “I estimate that between 60% and 90% of taxpayers that transfer real property for little or no consideration to family members fail to file a Form 709 as required by the internal revenue laws.”

So, the short answer to the question of whether you should deed real estate prior to your death as part of your estate plan is now even a more adamant NO, NO, NO — do not deed real estate to your family members (or anyone else), at least without understanding the tax consequences.   And, by the way, there are several strategies that will allow you to avoid probate, without having to worry about the tax consequences.